§ 4. Mr. David Amess (Southend, West)
If she will make a statement on changes in trends in inward investment into the UK in the last six months. 
§ The Minister for Employment and the Regions (Alan Johnson)
The trend in the past six months has been for overseas companies, especially from the United States, in the aftermath of 11 September, to delay plans for investing abroad. That reflects worsening global economic conditions. Invest UK continues to register successes and receive fresh inquiries from north America and our other traditional sources of foreign investment in Europe and Asia-Pacific. We are confident that we are maintaining the United Kingdom's position and attracting more inward investment than any other European nation.
§ Mr. Amess
Sadly, I do not share the Minister's confidence. Will he explain to the House how, according to an Ernst & Young survey, the number of inward-investment projects coming to Britain has dramatically fallen in the past six months? Is not it a fact that, under the previous Conservative Government, there was a competitive advantage that this wretched and incompetent Government have completely frittered away as a result of increased taxation and more regulation and red tape?
§ Alan Johnson
We are all in danger of getting vibration injury when the hon. Gentleman asks a question in the House. He has not kept abreast of what has been 1092 happening in the global economy in the past six months. With regard to his question, the OECD report published only this week stated that the UK wasbetter placed to weather the downturn than its other 29 members.The recent economic intelligence unit report confirmed that the UK has been one of the most attractive business locations in the world for the past four years and said that we were likely to remain so for the next four years. We are third in the world at attracting inward investment and the No. 1 in Europe. That is a splendid record, especially in comparison with that of the previous Conservative Government.
§ Mr. Andy Reed (Loughborough)
While I recognise the importance of inward investment—as a former economic development officer, I can say that my colleagues and I spent a lot of time trying to attract it—does the Minister agree that the vast majority of jobs in constituencies such as Loughborough will come from the growth of local firms and, in particular, an innovation and science base in places such as universities? What measures is he taking to ensure that those firms and other places receive equal support in growing small and local jobs? In particular, may I refer him to companies such as DataLink Ltd. in my constituency, an engineering firm that has seen 37 per cent. growth last year and doubled its work force?
§ Alan Johnson
My hon. Friend makes an extremely important point and speaks from some experience. We set out earlier this year in a White Paper our plans to help local businesses to develop the good ideas that emerge from our universities and translate them into good products on the market. In terms of inward investment, last year alone, Invest UK recorded 869 decisions to invest in the UK, which created 71,500 new jobs.
§ Sir Robert Smith (West Aberdeenshire and Kincardine)
Does the Minister recognise that one of the major attractions of this country for inward investment is the UK offshore oil and gas industry for production and exploration? Does he also recognise that the maintenance of the current infrastructure in the North sea is vital to the success of that industry and to the viability and attractiveness of future inward investment, and that nothing must be done to close down prematurely any of that existing infrastructure or damage that attraction and the ability to get the full potential out of the North sea?
§ Alan Johnson
In general, we have had some excellent announcements recently about investment in the North sea. However, my hon. Friend the Minister for Industry and Energy tells me that he would be very pleased to speak to the hon. Gentleman about the specific points that he makes.
§ Mr. John Whittingdale (Maldon and East Chelmsford)
The Minister completely failed to address the points made by my hon. Friend the Member for Southend, West (Mr. Amess). The Ernst & Young study that showed the fall in inward investment is clear about what caused it. It points to declining competitiveness, rising costs and less flexible labour markets. The Financial Times has reported that, this year alone, about 8,000 jobs have been lost as a result of companies switching production to lower-cost countries overseas. 1093 Has it not come to something when even the European Commission reports that the regulatory burden in Britain is heavier than anywhere else in the whole European Union? Are we not now paying the price for that in lost business, investment and jobs?
§ Alan Johnson
I tend to think that behind that question is the suggestion that the introduction of the national minimum wage, and of the right to four weeks' paid holiday a year, is somehow affecting our competitive position in the world. That is just not the case. The previous Conservative Government had a pitiful record on attracting foreign inward investment. Under the Tories, foreign direct investment dropped to £7 billion in 1994. Under this Government, it had rocketed to £88 billion in 2000. We need no lessons from the Opposition on attracting inward investment.
§ Andy Burnham (Leigh)
The Minister is aware of the problems of the decline in manufacturing industry in my constituency, and I am grateful for his help in addressing them. Is he aware of the good news of the increasing role that small local companies are playing in my constituency—particularly innovative local companies that have gone from being small businesses to medium-sized businesses, such as Patak's, and Waterfields Bakeries? How does the Department propose to recognise and reward innovative good practice in small companies, and turn good ideas into business success stories?
§ Alan Johnson
My hon. Friend raises an important point. One of our main projects to encourage small businesses to innovate and be more creative is the SMART award—the small firms merit award for research and technology. I am pleased to announce that my right hon. Friend will release details later today of the latest 37 companies to benefit from the DTI SMART funding scheme. The SMART award has increased annual turnover in the economy by £2.4 million for every £1 million invested. It has boosted annual turnover and annual exports, and is part of the Government's commitment to help companies to turn new ideas and technology into prosperity and jobs.